It begins with a brief synthesised fanfare. Then comes the rhythm: choppy, insistent and clonky. A soulful solo vocal extemporises, before the hook comes in: "Ooh, techno city." A Detroit radio announcer robotically states "the time is 6.57am": sampled, sped up, slowed down and cut up, his voice will repeat on and off throughout the next six minutes.

The mood is straight out of We, Yevgeny Zamyatin's dystopian novel: you wake up, one of millions in the cold, regimented technopolis. Or you could just as easily be seeing in the dawn after an all-nighter, or at an insomniac/stoned night drive. The first verse doesn't kick in for two minutes, and it's simple: "Ooh, techno city, hope you enjoy your stay; welcome to techno city, you will never want to go away."

This invitation is backed up by delicious analogue sounds: ghostly voices with just a hint of a gospel inflection, smooth synthesiser melodies, vocal samples, a bite of wailing rock guitar, prominent computer-generated handclaps and backwards percussion. Augmented by dub-wise interludes, these elements shift in and out of phase for the next few minutes, an enveloping sound wave.

Techno City was first released in 1984. Cybotron had been around since the early 80s: formed by Juan Atkins and Richard "3070" Davis, they self-released two 45s; Alleys of Your Mind and Cosmic Cars, before signing to Fantasy Records in 1983. Techno City was their third 12" for the label, and perhaps the most fully realised example of their revolutionary vision.

The most exciting thing about the musical climate of the late 70s/early 80s was the dialogue between the (European) avant garde and US Afro-futurism, the first recorded wave of hip-hop/electro. The most celebrated examples are Planet Rock and The Adventures of Grandmaster Flash On the Wheels of Steel, but there's a whole host of other crossover records.

Cybotron came from Detroit, now infamous for a stark decline that was already well in motion by the early 80s. Davis and Atkins saw this not as a disaster, but as an inspiration: "You can look at the state of the city as a plus," Atkins told me in 1993. "When the new technology came in, Detroit collapsed as an industrial city, but Detroit is Techno City. We're at the forefront here."

Emptiness meant space, and that gave the opportunity to drift through the ruins, as Davies remembered: "At the time of Cosmic Cars, I was living in the suburbs, Juan would have to take long drives for us to get together. It was part of the city's nightlife that you had to interface with car radios – Gary Numan did it with Cars. It was necessary to interface with that tribe."

A big factor in Cybotron's development was the DJ Electrifying Mojo, who regularly played Kraftwerk, Gary Numan, Ultravox and the Human League interspersed with soul and funk on Detroit radio. Kraftwerk had been promoted to the disco market since Trans-Europe Express in 1977 – see Vince Aletti's Record World columns collected in the djhistory.com book The Disco Files.

To Cybotron this wasn't just a radio show but a way of seeing the world: "You gotta be into science fiction to be into that kind of electronic music," Atkins insisted. With Alvin Toffler's The Third Wave and its concept of the Techno Rebels as their guide, the pair started to make their own music: "The whole idea was to do something futuristic, that hadn't been done before."

Alleys of Your Mind, Cosmic Cars and Clear are all classics but Techno City is the one where it all comes together. It could easily soundtrack Blade Runner or Metropolis, the classic Fritz Lang silent film that gave Davies the track's underlying concept: "Techno City was divided into different sectors, the privileged sector in the clouds and the underground workers' city."

"The idea was that a person could be born and raised in Techno City, the workers' city, but what he wanted to do was work his way to the cybodrome where artists and intellectuals reside. There would be no Moloch, but all sorts of diversions, games, electronic instruments. Techno City was the equivalent of the ghetto in Detroit, which is overlooked by the Renaissance Tower."

Cybotron were not alone in seeking to remap their inner urban environment: artists and musicians in New York, Sheffield, Berlin, Cleveland, Manchester and several other cities in Europe and America were inspired by dereliction and emptiness to project themselves into the future. The result was a riot of analogue synthetics, strange haircuts and science-fiction concepts.

Early 80s electronica was based on apparent paradoxes. Its dystopian lyrics belied a poised positivity: like Cybotron sing, with perfect equivocation, "in your mind it's a brand new day". The whole aesthetic projected an icy chill – "pale shelter" indeed – but there was something in the danceable rhythms and the smeared sound of the analogue synth that was warm and comforting.

On its release, Techno City sounded like nothing else. Most Brits first heard it as the final cut on the fourth volume of Morgan Khan's Street Sounds Electro compilation, where it sat uneasily with Grandmaster DST's Herbie Hancock megamix, and Run DMC's early classic, Sucker MCs. Atkins split from Cybotron soon after, precipitated by arguments over the track.

Its influence was slow but pervasive – a complex story that has been well told elsewhere. Suffice to say that Techno City is now regarded as one of the first recorded examples of the techno genre, and that Atkins, along with Derrick May and Kevin Saunderson, is now regarded as one of the founders of that fundamental shift in dancefloor aesthetics.

But Techno City still shimmers, stately and mysterious, in the 21st century. Like Soft Cell's Bedsitter and Fingers Inc's Mystery of Love, it is among one of THE great 80s 12" dance records; a perfect fusion of technology, ambient mood and human warmth from a time when people were not afraid to project into the future. For that alone, it remains inspirational.